Will filing bankrupcy in UK clear my Irish debt?

Why do the bank still need a judgment against you. Can you not come to an arrangement with the bank to repay the negative equity back over time?

In any case for Onthehouse you are saying either he stops paying the mortgage or hands back the keys but do not tell the bank he is filing for bankruptcy and then the bank ends up selling the house at a loss plus costs which they will then get a judgment for against him. But it is now unsecured which is what he needs for it to be taken care of by the bankruptcy.

In that scenario he is probably better off not even telling them he is in the UK.
 
Correct. He is best not revealing his hand at all.

Even where a homeowner hands back the keys the bank legally must get a possession order.
 
With all this advice to declare bankruptcy in the UK I think people should point out the implications, if any, of doing so over there and here or in the rest of the EU?

Does it make your life more difficult with regard to getting loans, costs of insurance etc? We seem to be only getting one side of the story here. I don't actually know if there is another side to the story but I would presume everyone would just go bankrupt if there were no consequences?
 
Derek, of course there are consequences. Well getting credit will be out of the question for many years, but most people in this situation have damaged credit ratings already so that is of very little concern to them. You can't be a director of a limited company or run for public office. Again of little consequence to the average Joe escaping the tyranny of the banks here.

As for cost of insurance, nonsense. Why would being bankrupt make your insurance dearer?
 
Time said:
Even where a homeowner hands back the keys the bank legally must get a possession order.
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Why us that? I had assumed in the scenario of handing back the keys that one could also sign documents to tranfer title.

(I'm always asking you questions Time on this are area of law so I hope you don't mind but you are so knowledgeable on this area that I'm sure your advice is invaluable to people in dire straights financially).
 
Time said:
Derek, of course there are consequences. Well getting credit will be out of the question for many years, but most people in this situation have damaged credit ratings already so that is of very little concern to them. You can't be a director of a limited company or run for public office. Again of little consequence to the average Joe escaping the tyranny of the banks here.

As for cost of insurance, nonsense. Why would being bankrupt make your insurance dearer?
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Not sure why it's nonsense but if someone has no other source of potential credit could it make them more likely to inflate a claim? I don't know the dark arts of insurance rating but I think it was a valid question to ask.
 
I have never ever seen such a question on an insurance form. It would insinuate that a bankrupt is nothing more than a criminal.
 
dereko1969 said:
Not sure why it's nonsense but if someone has no other source of potential credit could it make them more likely to inflate a claim? I don't know the dark arts of insurance rating but I think it was a valid question to ask.
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Being bankrupt is not a crime, inflating an insurance claim is. There is also a big jump between the two. First, they would have to have an insurable loss, and then they must decide to inflate it. Both have nothing to do with being bankrupt!
I would also wonder if there is evidence of this being more likely to be perpetrated by a bankrupt? I doubt it.
 
Question on converting the mortgage to an unsecured debt: What if there is little to no prospect of the bank selling the house? If you are so far into negative equity that the house is in effect worthless, the bank can not sell it either and pursue you for the shortfall. What procedure would happen then?
 
It would hang over you like a dagger until such time as it could be sold. This is the reason there are very few actual repossessions yet.
 
Nobody seems to be talking about this aspect of it though. Can the bank sell my home for some magic beans and a pint of plain and pursue me for 300k, or do we both just sit around twiddling our thumbs until the house is worth what we paid for it, which will be long after the bank manager and I will be cold in our graves?
 
Luternau said:
Being bankrupt is not a crime, inflating an insurance claim is. There is also a big jump between the two. First, they would have to have an insurable loss, and then they must decide to inflate it. Both have nothing to do with being bankrupt!
I would also wonder if there is evidence of this being more likely to be perpetrated by a bankrupt? I doubt it.
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Sorry I wasn't trying in any way to state that declaring bankruptcy was criminal or that those doing so were more likely to commit criminal acts, I was just asking a question about the possible implications of declaring bankruptcy on other financial transactions and insurance was one that came to mind.

Looks like I may have disproved the theory that there's no such thing as a stupid question!
 
Magpie said:
Nobody seems to be talking about this aspect of it though. Can the bank sell my home for some magic beans and a pint of plain and pursue me for 300k, or do we both just sit around twiddling our thumbs until the house is worth what we paid for it, which will be long after the bank manager and I will be cold in our graves?
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Unless the banks put the houses up for auction with no reserve price, they won't sell. I suppose they could be sold for a very small amount but then the bank would fail to get the best price. It is a difficult one.

You could buy a house for $100 during the great fire sales in the USA. Could it happen here?
 
The US is a very different case.

They have non-recourse mortgages so the former owner/mortgagor has no interest in the sale price and could even buy it back themselves if they wished.

The real difference however is that there would be taxes due on the houses being sold for such incredibly low money - I read of houses for sale for $100 but with back-taxes of many thousands which the new owner would be liable for. Add in the neighbourhoods of Detroit in question, and it all adds up to a money-pit.

To answer magpie, banks do have a duty to their (ex) customers to get the best price for a repossessed house, although what that would be in current circumstances could be a matter for some arguement.
 
There's no real answer is there? I'm not unique in having a house that is, to all intents and purposes, entirely worthless. It's in an area where there is a plethora of bigger, nicer, better properties sitting empty unable to sell. A neighbour has a house on the market which is similar but bigger and despite more than halving the price can't even get a viewing.

It wasn't an issue until now, for various reasons we are struggling to pay the mortgage and looking at options, but no-one can tell us how reposessions etc work with a worthless house.
 
I suppose that nobody can tell you about the bank reposessing the house as there aren't that many reposessions in Ireland. In the UK there are a lot more.
I would assume that you'd go to the bank and tell them that you are unable to service the mortgage and are voluntarily handing back the keys. You are also giving them permission to sell the house. Of course they are entitled to pursue you for the shortfall and this is when you would declare yourself bankrupt.
Part of the terms of the IMF/EU bailout was that Ireland's bankruptcy laws be modernised by March 2012. Therefore remaining in Ireland and declaring yourself bankrupt is also an option. However, I don't know what the ins and outs of Irish bankruptcy will be. One of the points made in the law reform's recommendation was that the family home remains in the bankruptcy. Not sure what the position is if the family home is in negative equity. If this is the case in the UK then you can usually stay in the family home. If Irish bankruptcy becomes more accessible then I would predict that property will fall further in value.
 
Of course, given that the banks are state owned it's not in the general publics interest to see bankruptcies increase.

So hopefully the government is telling the banks not to release the security on the loans for any reason. (and ideally the government will introduce a criminal law that results in a mandatory prison sentence for bank employees that ignore this)
 
Hi Time,

Is it possible to declare personal bankrupcy in Northern Ireland(Belfast) and not travel to England,is there any difference in the proceedings from travelling North or accross the waters to Manchester or London? I have done some research myself and it looks to me like Belfast is a very possible option?
I also believe I would need to set up home and work in the North for approx 6-7 months then declare im bankrupcy to clear my Irish deaths?


Thanks
Chris
 
bankruptcy in England

Hello posters, I notice that a call has gone out for an insolvency expert fron the Uk to advice on whether you can go bankrupt here in England and write off your Irish debts.
The original poster is already in the UK and so he will have established his COMI here. Ie England is his centre of main interest. That is the case even if all his debt is in Ireland. Any member of any EU country can declare bankruptcy in any other EU state and the proceddings are recognised on their own country.
Via this rule I have helped Latvians, Lithuanians and Irish citizens goe bankrupt here in the last year.
Establishing your COMI is the key. You cannot simply fly in, fill in your bankruptcy forms andhave a hearing and fly out. As there are no Comi issues I will not address that in this posting.

Under English insolvency rules it actually doesn't matter if the house in this case has already been repossessed or their is not a monetary judgment for the shorfall on the mortgage.
The reason for this is that upon the making of the bankruptcy order, the beneficial ownership of the property vests by operation of law into the Official Receiver. He then decides if he wants the property. He will only decide to keep it if it has equity he can realise. Not a situation here. So he says to the bank, ok you have it back, realise hat you can for me and tell me what he shortfall is. That is the sum then written off in the bankruptcy.
Our poster could of course simply hand the keys back in to the bank and tell them he is going bankrupt, the effect is the same.
Now some effects of bankrupcty. Your assets vest in the official receiver, so any shares, cash, positive balances at credit union or bank, all belong to the OR for the benefit of the creditors. You may keep a vehicle for work and travel to interviews with a value up to £2000.
You keep your pensions absolutely unless they have been grossly overfunded or the scheme is not an approved one. I have yet to see that.
Your job here in the UK is unaffected.
Your bank account could be frozen but I know two banks which will open an account and keep it open.
You are bankrupt for just one year.
You cannot be a company director only during the time you are bankrupt.

If you have excess income the Official receiver can take the surplus for 36 months. I have some great allowances I use to keep any surplus down.

In short as a way to deal once and for all with your investment property and other property debt, it is the perfect solution.
 
How does the Official Receiver gain access to bank accounts in different countries? What is the process?, does he write to irish banks, saying that the individuals assets are now under his control? (What if an Irish Bank refuses to acknowledge UK court orders?..)

Can the bank sell the house for a pittance?, or do they have to realise a fair price?

Who values the car? (must be less than 2,000)

Can tradesmen keep their tools? (i.e plasterers etc)? Any limits on this?

Who decides if a pension if massively overfunded? (And why should a pension be keep away from creditors)

You can no longer hold your seat in the Dail once declared bankrupt.
 
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